STATE OF SOUTH CAROLINA ) THIRD LOAN MODIFICATION AND
) EXTENSION AGREEMENT, CROSS-PLEDGE
COUNTY OF GEORGETOWN ) AND DEFAULT AGREEMENT, AND
MORTGAGE AMENDMENT AGREEMENT
THIS THIRD LOAN MODIFICATION AND EXTENSION AGREEMENT, CROSS-PLEDGE AND
DEFAULT AGREEMENT, AND MORTGAGE AMENDMENT AGREEMENT ("Agreement") is made and
executed to be effective the 29th day of September, 1995, by and between NEW
YORK LIFE INSURANCE COMPANY ("Lender" or "New York Life"), and XXXXXXX COMPANIES
INCOME PROPERTIES, L.P. I, a Delaware Limited Partnership ("Xxxxxxx" or
"Borrower" or "Maker"), who hereby agree as follows:
W I T N E S S E T H :
WHEREAS, Dayton & Associates XII, a South Carolina General Partnership,
executed its certain Promissory Note ("Note") dated June 2, 1988, whereby it
promised to pay to the order of New York Life Insurance Company the sum of One
Million Six Hundred Thousand Dollars ($1,600,000.00), or so much thereof as may
be advanced, with interest thereon at the rate of Nine percent (9.0%) per annum
as defined in said Note; and
WHEREAS, said Note is secured in whole or in part by a certain Mortgage,
Assignment of Leases and Rents and Security Agreement ("Mortgage") recorded on
June 1, 1988, in the Office of the Register of Mesne Conveyances for Georgetown
County, in Mortgage Book 337 at Page 133 and Deed Book 388 at Page 235; and
WHEREAS, simultaneously with the delivery of the Note and the Mortgage,
Dayton & Associates XII executed and delivered to Lender an Assignment of
Lessor's Interest in Lease(s) - with Assignment of Rents Income and Cash
Collateral ("Assignment of Leases") recorded in the Office of the Register of
Mesne Conveyances for Georgetown County in Book 288 at Page 224 on June 1, 1988;
and likewise filed in said office a UCC Financing Statement #000463 on June 3,
1988; and likewise filed on June 2, 1988 UCC Financing Statement #88-029099 in
the Office of the Secretary of State for South Carolina, ("UCC"); and
WHEREAS, Dayton and Associates XII transferred the real property
encumbered by said Loan and subject to the lien of the Mortgage to Xxxxxxx by
general warranty deed recorded July 12, 1988 in the Office of the Georgetown
County Clerk of Court in Book 294 at Page 94; and
WHEREAS, the maturity date of the Note was extended and certain terms and
conditions were modified by that certain Loan Modification and Extension
Agreement and Mortgage Amendment dated effective June 10, 1993 and recorded
September 21, 1993 in the Office of the Register of Mesne Conveyances for
Georgetown County, South Carolina in Book 642 at Page 299 along with that
certain UCC Financing Statement recorded in said Office on September 21, 1993 as
Document No. 63-1 ("First Modification"); and
WHEREAS, the maturity date on the Note was further extended and certain
terms and conditions were modified through that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment dated effective June 10, 1994,
and recorded December 29, 1994, in the Office of the Register of Mesne
Conveyances for Georgetown County, South Carolina, in Book No. 742 at Page 248
("Second Modification"); and
WHEREAS, said Note, Mortgage, Assignment of Leases, UCC, First
Modification and Second Modification, as further modified hereafter by this
Agreement, are hereinafter sometimes referred to collectively as the "Georgetown
Loan"; and
WHEREAS, Xxxxxxx wishes to extend the maturity date of said Georgetown
Loan until October 10, 1998, and modify and amend the Georgetown Loan in certain
other particulars as hereinafter provided; and
WHEREAS, Lender and Xxxxxxx have agreed to said modifications, amendments
and extension of said Georgetown Loan under the terms and conditions hereafter
set forth, and wish to document said modifications, amendments and extension by
the execution and recording of this Agreement; and
WHEREAS, Xxxxxxx and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Seven Million and Fifty Thousand Dollars ($7,050,000.00) dated June 2, 1988,
as secured by a Mortgage recorded in Mortgage Book 1936 at Page 273 in the
Office of the Register of Mesne Conveyances for Greenville, South Carolina (the
"RMC Office"), together with all related loan documents which Mortgage was
modified by that certain Loan Modification and Extension Agreement and Mortgage
Modification recorded in said RMC Office in Book 2442 at Page 240, and was
further modified by the Second Loan Modification and Extension Agreement and
Mortgage Amendment recorded in said RMC Office in Book 2632 at Page 104, and
which is being further modified and amended simultaneously herewith (the
"Greenville Loan"); and
WHEREAS, Xxxxxxx and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Eleven Million Four Hundred Thousand Dollars ($11,400,000.00) dated June 8,
1988, as secured by a Mortgage recorded in Mortgage Book 1052 at Page 198 and
Deed Book 1041 at Page 64 in the Office of the Register of Mesne Conveyances for
Aiken County, South Carolina (the "RMC Office"), together with all related loan
documents which Mortgage was modified by that certain Loan Modification and
Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book 718 at Page 337 along with that certain UCC Financing
Statement Amendment Number 1453 also filed in said office in Mortgage Book 1579
at Page 104, and was further modified by that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book Volume 777 at Page 324, and which is being further modified
simultaneously herewith (the "Aiken Loan").
NOW, THEREFORE, Lender and Xxxxxxx in consideration of the sum of One and
00/100 Dollar ($1.00), the principal reduction of the Georgetown Loan by the
amount of Fifty Thousand and 00/100 Dollars ($50,000.00), the additional cross-
collateralization between and among the Georgetown Loan, the Greenville Loan and
the Aiken Loan, and other good and valuable consideration paid by Xxxxxxx, the
mutual covenants herein contained, the receipt and sufficiency of which is
hereby acknowledged by all parties, do hereby agree to the modifications and
amendments of the terms for payment of the indebtedness evidenced by said Note,
and to the terms of collateral security for repayment thereof, as secured by
said Mortgage and other Georgetown Loan documents, so that the same shall be due
and payable as follows, and further agree to all matters hereinafter set forth:
1. Incorporation of Recitals. The above recitals are incorporated into
and made a part of this Agreement.
2. Outstanding Principal Balance of Loan. The outstanding principal
balance of the Georgetown Loan, after deducting a principal pay down of Fifty
Thousand and 00/100 Dollars ($50,000.00) made simultaneously herewith, is One
Million Five Hundred Twenty-Seven Thousand Four Hundred Thirty-One and 66/100
Dollars ($1,527,431.66) as of the date hereof. Concurrently with the execution
of this Agreement, Xxxxxxx shall remit payments to Lender of $7,492.80,
representing the per diem interest for the period from September 10, 1995
through September 28, 1995, and $4,200.44 representing the per diem interest for
the period from September 29, 1995 through October 9, 1995, due and payable
October 10, 1995.
3. The New Maturity Date; Renewal Option. The New Maturity date of the
Georgetown Loan shall be revised from June 10, 1995 to October 10, 1998.
Moreover, Xxxxxxx shall have the option to renew the existing loan balance for
an additional (2) years at an interest rate to be determined by Lender in its
sole and absolute discretion, and the amortization schedule shall be recast to
reflect a fifteen (15) year amortization schedule provided that (i) neither the
Georgetown Loan nor the Greenville Loan or the Aiken Loan is in default, (ii)
the loan to value does not exceed eighty-five percent (85%), and (iii) the debt
coverage ratio is greater than or equal to 1.10, all of which to be determined
by Lender in its sole and absolute discretion. Xxxxxxx shall notify Lender of
its intention to renew the loan not earlier than one hundred twenty (120) days
nor later than ninety (90) days prior to the New Maturity date of the Georgetown
Loan.
4. The Interest Rate; Monthly Payments; Principal Balance at Maturity.
The interest rate for said Georgetown Loan shall remain at Nine percent (9.0%)
per annum. The monthly installments shall be in the amount of Fourteen Thousand
Three Hundred Four and No/100 Dollars ($14,304.00) due on the 10th day of each
month, commencing with such installments upon the tenth day of November 1995,
and continuing thereafter on the tenth day of each month to and including
October 1998, at which time the principal balance and all other sums remaining
unpaid on the Georgetown Loan shall be due and payable.
5. Prepayment Provision. It is agreed that the Note for the Georgetown
Loan shall be modified to provide the following prepayment privilege:
Upon ninety (90) days written notice to New York Life, Maker may
prepay the Note in full on any monthly installment due date provided
there is paid, in addition to interest accrued to the date of such
prepayment, a prepayment fee equal to the difference between the
Loan Interest Rate and the Yield on U.S. Treasury Notes for a term
equal to the remaining original loan term times the outstanding
principal balance of the Georgetown Loan at the time of such
prepayment multiplied by the number of years and any fraction
thereof on the loan term as if there had been no prepayment. In no
event shall the prepayment fee be less than one percent (1%). The
prepayment fee is to be computed on the unpaid principal balance at
the time of such prepayment.
In the event the outstanding principal balance hereof shall become
due and payable as a result of (a) an Event of Default (as such term
is defined in the Mortgage) causing the acceleration under this Note
or the Loan Documents, which Event of Default shall be conclusively
deemed to be a willful default for purposes of avoiding the
prepayment fee to which Holder is entitled; (b) the exercise by
Maker or any other party having the right to redeem or to prevent a
foreclosure of the Secured Property of any right of redemption or
repayment under foreclosure laws or other action to prevent a
foreclosure of the Secured Property; (c) an acceleration by Holder
as a result of the sale or further encumbrance of the Secured
Property in violation of the applicable provisions of the Mortgage;
or (d) a casualty or condemnation with respect to the Secured
Property; then, in such event, Maker shall pay the prepayment fee
and to the extent permitted by law, such prepayment fee shall be
calculated in the same manner as specified above; provided that in
the event such prepayment fee is construed to be interest under the
laws of the State of South Carolina in any circumstance, such
payment shall not be required to the extent that the amount thereof,
together with other interest payable hereunder, exceeds the maximum
interest that may be lawfully charged under the laws of the State of
South Carolina.
6. Cross-Default and Cross-Collateralization. It is expressly
understood and agreed that the occurrence of a default under the Greenville Loan
or the Aiken Loan, or any document securing either of them, or a default under
this Georgetown Loan, for which no right to notice or cure shall exist, shall
constitute a cross default under each of the Greenville Loan, the Aiken Loan and
the Georgetown Loan, and the rights of enforcement and other rights and remedies
applicable to default shall be fully operative and applicable as to each and all
of said Greenville Loan, Aiken Loan and Georgetown Loan. The Mortgage and other
Loan Documents for the Georgetown Loan shall hereby be amended to add the
description of the collateral from each of the Greenville Loan and the Aiken
Loan to the collateral (Secured Property) securing the Georgetown Loan, which
descriptions are as set forth on Exhibits "A" and "B" hereto, respectively, and
which are incorporated into and made a part of this Agreement.
7. Insurance. Section 1.03(F)(2) of the Georgetown Mortgage is hereby
deleted and substituted in lieu thereof is the following revised Section
1.03(F)(2):
(2) In the event of any such damage or destruction, Mortgagee
shall have the option in its sole and absolute discretion and
without regard to the adequacy of its security hereunder of applying
all or part of the insurance proceeds (i) to the Indebtedness,
whether or not then due, in the inverse order of maturity, or (ii)
to the repair or restoration of the Improvements, or (iii) to cure
any then current default under this Mortgage or the other Loan
Documents, (iv) to reimburse the costs and expenses of Lender in
connection with the recovery of such insurance proceeds, or (v) any
combination of the foregoing.
8. Insurance. Section 1.03(F) is further amended by adding the
following provisions as new subsections:
(4) Mortgagor's Use of Proceeds. In the event of any destruction
to the Premises by fire or other casualty (except for any
destruction which occurs during the last six (6) months of the loan
term), the insurance proceeds shall be made available to the
Mortgagor for repair and restoration after deducting and payment to
Mortgagee of Mortgagee's costs of collection and disbursement of
such proceeds, and any other deductions Mortgagee is entitled to
under subsection (F)2 above, provided:
(a) The proceeds are deposited with Mortgagee;
(b) No default shall have occurred and be continuing under
the terms of any of the Loan Documents;
(c) The insurance carrier does not deny liability to any
named insured;
(d) If Mortgagee so requests, Mortgagee is furnished with an
estimate of the cost of restoration accompanied by a
certificate of Mortgagee's Architect as to such costs;
(e) The value of the Secured Property so restored or rebuilt
shall be at least equal to what was originally erected;
(f) Mortgagor furnishes Mortgagee with evidence reasonably
satisfactory to Mortgagee that all Improvements so
restored and/or reconstructed and their use shall fully
comply with all (i) applicable easements, covenants,
conditions, restrictions or other private agreements
affecting the Premises, (ii) zoning and building laws,
ordinances and regulations and (iii) all other
applicable federal, state and municipal laws,
regulations and requirements;
(g) If the estimated cost of reconstruction exceeds the
proceeds available, at Mortgagee's option, Mortgagor
shall (i) furnish a bond of completion or provide such
other evidence satisfactory to Mortgagee of Mortgagor's
ability to meet such excess costs of (ii) deposit with
Mortgages additional funds equal to such excess;
(h) Mortgagee shall have received notice of destruction
caused by such fire or other hazard from the Mortgagor
within ten (10) days from the date thereof, which notice
shall state the date of such fire or other hazard and a
request to Mortgagee to make the insurance proceeds
available to Mortgagor;
(i) The aggregate monthly net income under all Leases
remaining in full force and effect with respect to the
Secured Property after restoration shall be in an amount
sufficient to pay the monthly installments of principal
and interest required to be paid upon the Obligations as
well as all escrows for taxes and insurance as estimated
by Mortgagee hereunder;
(j) All Leases remain in full force and effect; and
(k) Mortgagee shall have determined that such damage or
destruction is fully reparable prior to the Maturity
Date (as defined in the Note).
(5) Disbursement of the proceeds during the course of
reconstruction shall be upon the certification of Mortgagee's
Architect as to the cost of the work done and the conformity of the
work to plans and specifications approved by Mortgagee, and evidence
supplied by a title insurance company acceptable to Mortgagee that
there are no liens arising out of the reconstruction or otherwise.
Notwithstanding the above, a portion of the proceeds may be released
prior to the commencement of reconstruction to pay for items
approved by Mortgagee in its sole discretion. Disbursements shall
be made within ten (10) business days after a request by Mortgagor.
No payment made prior to the final completion of work shall exceed
ninety percent (90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of said proceeds
remaining with the Mortgagee must be at least sufficient to pay for
the cost of completion of the work free and clear of liens. Final
payment shall be upon a certification of Mortgagee's Architect as to
completion in accordance with plans and specifications approved by
Mortgagee.
(6) At such time as Mortgagee's Architect shall certify to
Mortgagee that the damaged or destroyed portion of the Secured
Property has been put in a state of repair equivalent to or better
than that existing prior to the date of such fire or other casualty,
the work shall be deemed completed. With Mortgagee's prior written
consent, which may be granted or withheld in Mortgagee's sole
discretion; any certification required to be made by an architect or
registered engineer may be made by a reputable contractor approved
by Mortgagee. The balance of the insurance proceeds so deposited
with Mortgagee after full disbursement in accordance with the terms
herein, at the sole option of Mortgagee, shall be either (a)
returned to Mortgagor, it being understood that such obligation or
reimbursement shall not exceed the amount of insurance proceeds for
such restoration and/or repair, or (b) applied to the payment of
installments of the Obligations in inverse order of maturity whether
or not such installments shall be due and payable.
(7) In all cases where any destruction to the Secured Property by
fire or other casualty occurs during the last six (6) months of the
loan term, or in Mortgagee's sole judgment, Mortgagor is not
proceeding with the repair or restoration in a manner that would
entitle Mortgagor to have the proceeds disbursed to it, or for any
other reason Mortgagee determines in its sole judgment that
Mortgagor shall not be entitled to such proceeds pursuant to the
terms of this Mortgage, Mortgagee shall have the options set forth
in subsection F(2) above.
(8) Under no circumstances shall Mortgagee become personally
liable for the fulfillment of the terms, covenants and conditions
contained in any of the Leases or obligated to take any action to
restore the Secured Property.
9. Covenants Regarding Hazardous Substances. Sections 1.10 and 1.13(B)
of the existing Georgetown Mortgage are hereby deleted in their entirety and in
lieu thereof is substituted the following:
1.10 A. Mortgagor's Representations, Warranties &
Covenants.
To the best of Mortgagor's actual knowledge, Mortgagor
represents, warrants and covenants that Hazardous Materials are not
being used, on, from, or affecting the Secured Property in any
manner and, to the best of Mortgagor's actual knowledge, no prior
owner of the Secured Property or any tenant, subtenant, prior tenant
or prior subtenant has used "Hazardous Materials" as such term is
hereinafter defined, on, from, or affecting the Secured Property, in
any manner. Mortgagor represents warrants and covenants: (i) that
the Secured Property is in compliance with all Environmental Laws
(as hereafter defined); (ii) that there are no conditions existing
currently or reasonably likely to exist during the term of this
Mortgage which would subject Mortgagor to damages, penalties,
injunctive relief or cleanup costs under any Environmental Laws as
such term is hereinafter defined, or assertions thereof, or which
require or are likely to require cleanup, removal, remedial action
or other response pursuant to Environmental Laws by Mortgagor; (iii)
that Mortgagor is not a party to any litigation or administrative
proceedings, nor so far as is known by Mortgagor is any litigation
or administrative proceeding threatened against it, which asserts or
alleges that Mortgagor has violated or is violating Environmental
Laws or that Mortgagor is required to clean up, remove or take
remedial or other responsive action due to the disposal, depositing,
discharge, leaking or other release of any hazardous substances or
materials; (iv) that neither the Secured Property nor Mortgagor is
subject to any judgment, decree, order or citation related to or
arising out of Environmental Laws or has been named or listed as a
potentially responsible party by any governmental body or agency in
a matter arising under any Environmental Laws; (v) that no permits,
licenses or approvals material to the ownership or operation of the
Secured Property are required under Environmental Laws relative to
the Secured Property, or any portion of the Secured Property; and,
(vi) to the best of Mortgagor's knowledge, there are not now, nor to
the best of Mortgagor's knowledge after due and diligent inquiry
have there ever been materials stored, deposited, treated, recycled
or disposed of, on, under or at the Secured Property (or tanks or
other facilities thereon containing such materials) which materials
or contained materials, if known to be present at the Secured
Property or present in soils or ground water, would require cleanup,
removal or some other remedial action under Environmental Laws.
Mortgagor shall promptly advise Mortgagee in writing of any
Hazardous Materials claims which are hereafter asserted, or if
Borrower obtains knowledge of any discharge, release, or disposal of
any Hazardous Materials in, on, under or about the Secured Property,
or that any condition described hereinabove has occurred.
B. Definition "Environmental Laws".
Wherever used in this Mortgage and/or the Loan Instruments,
the term, "Environmental Laws" shall mean the Comprehensive
Environmental Response Compensation and Liability Act as amended, 42
U.S.C. Section 9601, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.; any so-called "Superfund" or
"Superlien" law or any other federal, state, local and foreign laws
or regulations, codes, plans, orders, decrees, judgments,
injunctions, notices or demand letters issued, promulgated or
entered thereunder relating to pollution or protection of the
environment, (collectively "Environmental Laws"), including without
limitation, Environmental Laws relating to reclamation of land and
waterways and Environmental Laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes or otherwise relating to worker
health and safety or public health and safety, in each case material
to the ownership or operation of the Secured Property. Neither the
Mortgagor nor, to the best knowledge and belief of the Mortgagor,
any other person has ever caused or knowingly permitted, in
violation of law, any Hazardous Materials to be placed, held,
located or disposed of, on, under or at the Secured Property or any
part thereof, or any other real property legally or beneficially
owned (or any interest or estate which is owned) by the Mortgagor in
any state now or hereafter having in effect a so-called "Superlien"
law or ordinance or any part thereof (the effect of which would be
to create a lien on the Secured Property to secure any obligation in
connection with the real property in such state), and neither the
Secured Property, nor any part thereof, nor any other real property
legally or beneficially owed (or any interest or estate therein
which is owned) by the Mortgagor in any state now or hereafter
having in effect a so-called "Superlien" law or ordinance or any
part thereof, has ever been used (whether by the Mortgagor, to the
best knowledge of the Mortgagor, by any other person) as a dump site
or storage (whether permanent or temporary) site for any Hazardous
Materials. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge and belief of Mortgagor, any
other person has ever caused or knowingly permitted any asbestos or
under-ground, storage facility to be located on the Secured
Property. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge or belief of Mortgagor having
made no investigation, any other person has discovered any
occurrence or condition on any real property adjoining or in the
vicinity of the Secured Property that could cause the Secured
Property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of the Secured
Property under any federal, state local law, ordinance or regulation
relating to Hazardous Materials.
C. Environmental Indemnification of Mortgagee.
Mortgagor hereby indemnifies and agrees to defend, protect and
hold Mortgagee, its partners, employees and agents, and any
successor, successors, or assigns to Mortgagee's interest in the
chain of title to the Secured Property, harmless from and against
any and all losses, liabilities, fines, charges, damages, injuries,
penalties, response and investigation costs, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered
by or asserted against Mortgagee including without limitation, (a)
any loss in value of the improvements, (b) all foreseeable
consequential damages; (c) the costs of any required or necessary
repair, cleanup or detoxification of the Secured Property, and the
preparation and implementation of any closure, remedial or other
required plans; and (d) all reasonable costs and expenses incurred
by Mortgagee in connection with clauses (a), (b) and (c) hereof,
including but not limited to, reasonable attorneys' fees and fees of
any and all other consultants, experts and engineers and witnesses
(expert and otherwise) for, with respect to, or as a direct or
indirect result of (i) the presence on or under, or the escape,
seepage, leakage, spillage, emission, discharge or release from, the
Secured Property or any other property legally or beneficially owned
(or any interest or estate which is owned) by Mortgagor of any
Hazardous Material (as hereinafter defined) (including, without
limitation, any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under, through or as a result
of any Environmental Laws relating to or imposing liability or
standards of conduct concerning any Hazardous Material), or (ii) the
presence of any asbestos on the Secured Property (including, without
limitation, the cost of relocating tenants and the cost of removal)
regardless of whether caused by, or within the control of,
Mortgagor, or any predecessor in title or any employees, agents,
contractors or subcontractors of Mortgagor, or any third persons at
any time, occupying or present on the Secured Property, or arising
out of or related to any breach of Mortgagor's obligations under
this Mortgage. Any of such activities were or will be undertaken in
accordance with Environmental Laws. For the purposes of this
Mortgage, the term "Hazardous Material" means and includes any
flammable explosives, radioactive materials, or hazardous, toxic or
dangerous waste, substance or related material including, but not
limited to, substances defined as such in (or for purposes of) the
Environmental Laws regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter in
effect. The indemnification and hold harmless agreement of
Mortgagor contained herein shall survive the repayment of all sums
due under the Loan Documents and the discharge and satisfaction of
this Mortgage of transfer of title to Mortgagee or any third party
by foreclosure or otherwise.
D. Compliance With Environmental Laws.
Mortgagor shall keep and maintain the Secured Property in
compliance with and shall not cause or permit the Secured Property
to be in violation of any Environmental Laws or any federal, state
or local laws relating to hygiene or to the environmental conditions
on, under or about the Secured Property including, but not limited
to, soil and ground water conditions. Mortgagor shall not use,
generate, manufacture, store, dispose or permit to exist in, on,
under or about the Secured Property any Hazardous Material.
Mortgagor hereby agrees at all times to comply fully and in a timely
manner with, and to cause all of its employees, agents, contractors
and subcontractors and any other persons occupying or present on the
Secured Property to so comply with all Environmental Laws applicable
to the use, generation, handling, storage, treatment, transport,
storage, manufacture and disposal of any Hazardous Material now or
hereafter located or present on or under the Secured Property,
including, but not limited to any underground storage tanks.
E. Written Consent for Environmental Action.
Without Mortgagee's prior written consent, Mortgagor shall not
take any remedial action in response to the presence of any
Hazardous Materials, on, under, or about the Secured Property, nor
enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Materials claims, which
remedial action, settlement, consent or compromise might, in
Mortgagee's sole judgment, impair the value of Mortgagee's security
hereunder; provided, however, that Mortgagee's prior consent shall
not be necessary in the event that the presence of any Hazardous
Material on, under, or about the Secured Property either poses an
immediate threat to the health, safety or welfare of any individual
or is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Mortgagee's consent
before taking such action, provided that in such event Mortgagor
shall notify Mortgagee as soon as practicable of any action so
taken. Mortgagee agrees not to withhold its consent where such
consent is required hereunder, if either (a) a particular remedial
action is ordered by a court of competent jurisdiction, or (b)
Mortgagor establishes to the reasonable satisfaction of Mortgagee
that there is no reasonable alternative to such remedial action
which would result in less impairment of Mortgagee's security
hereunder.
F. Mortgagee's Right to Contest Environmental Claims.
Mortgagee shall have the right, but not the obligation, to
join and participate in, as a party if it so elects, any legal
proceeding or actions initiated by any person or entity in
connection with any Hazardous Materials claims and in such case, to
have its reasonable attorneys' fees and costs incurred in connection
therewith paid by Mortgagor.
10. Audits. Section 1.06(B) of the Georgetown Mortgage shall be amended
by adding at the end of the existing sentence, the additional words "at
Mortgagor's expense".
11. Compliance with Laws. Section 1.11(K) of the Georgetown Mortgage is
amended by adding at the conclusion thereof the following additional provisions:
Mortgagor shall comply with any and all state and federal
legislation relating to environmental protection and such other
legislation, rules and regulations as are in or may come into effect
and apply them to Mortgagor, Mortgagee, this Loan Transaction or the
Secured Property or occupancy users thereof, whether as lessees,
tenants, licensees or otherwise. Mortgagor does agree to indemnify
and hold Mortgagee harmless against any and all claims, costs or
expenses relating to such environmental protection, real estate
taxes, insurance premiums, as well as fraud, material
misrepresentation or misappropriation of funds notwithstanding any
exculpation or non-recourse provision in the Loan Documents.
12. Further Sales or Encumbrances. Section 1.12(B) of the Georgetown
Mortgage is modified by adding to the initial paragraph at the conclusion
thereof, the following additional provisions:
For purposes of this paragraph, the following shall also be
deemed to constitute a transfer of the Secured Property, whether
made directly or through an intermediary:
(i) If Mortgagor is a corporation, a transfer or
disposition of more than fifty percent (50%) of the outstanding
voting stock of Mortgagor; or
(ii) If Mortgagor is a partnership, a transfer of
disposition of any interest of any general partner in Mortgagor.
Notwithstanding the foregoing, however, Mortgagor shall be permitted the one-
time right to transfer title to the Secured Property to an affiliated entity in
which the general partner is the current general partner of Mortgagor.
13. Covenants Regarding Tenant Improvement, Leasing Commissions, Capital
Improvements and Debt Service Shortfall Escrow Account. Xxxxxxx covenants and
agrees that within fifteen (15) days following the end of each calendar quarter
commencing January 1, 1996, Xxxxxxx shall deposit or cause to be deposited into
an account maintained at a commercial bank (the "Depository") acceptable to
Lender all Net Cash Flow as hereinafter defined, generated from the use and
operation of the Secured Property, during the immediately preceding calendar
quarter (the "Escrow Account"). Proof of such deposit, in the form of either a
copy of the deposit slip or a statement from the Depository, shall be submitted
to Lender no later than twenty (20) days following the end of each calendar
quarter. Provided that the Georgetown Loan is not in default, the funds on
deposit in the Escrow Account shall from time to time be applied by Depository
or disbursed to Xxxxxxx to pay for tenant improvements, leasing commissions,
capital improvements and/or debt service shortfall. Additionally, a maximum
amount calculated at two percent (2%) of the total collected revenue shall be
deducted from Net Cash Flow to be applied to the payment of partnership
operating costs.
"Income" shall mean all rents, income and profits received on a cash basis
by Xxxxxxx from the Secured Property.
"Net Cash Flow" shall mean Income less operating expenses. Operating
expenses shall include a property management fee not to exceed three percent
(3%) of the total base rental income and expense reimbursements.
Within fifteen (15) days after the end of each calendar quarter, Xxxxxxx
shall submit to Lender a statement of Net Cash Flow for the preceding quarter,
certified to be true and accurate by an officer of Xxxxxxx. Additionally,
within fifteen (15) days after the end of each calendar year Xxxxxxx shall
submit to Lender a statement of New Cash Flow for the preceding year, certified
to be true and accurate by an officer of Xxxxxxx.
Funds in the Escrow Account are to be used for costs incurred relating to
tenant improvements, leasing commissions, capital improvements and potential
debt service shortfall. Additionally a maximum amount calculated at two percent
(2%) of the total collected revenue may be deducted from Net Cash Flow to be
applied to the payment of partnership operating costs.
For disbursements (as hereinafter defined) to be made, the following
conditions must be met:
(A) All work shall be performed in a good and workmanlike manner, using
materials of at least standard grade and quality, to the
satisfaction of Lender in its sole discretion, free and clear of any
claims or liens for labor and materials.
(B) The deposits shall be held in an escrow account satisfactory to
Lender and by a Depository acceptable to Lender as assurance of the
performance of the work. Interim disbursements (each a
"Disbursement") of the Escrow Account shall be made to Xxxxxxx for
not less than Five Thousand and 00/100 Dollars ($5,000.00) per
request and no more often than one time per calendar quarter.
Lender shall direct Depository to make Disbursements conditioned
upon the following:
(1) There is no default under this Georgetown Loan, the
Greenville Loan or the Aiken Loan and Xxxxxxx shall
deliver to Lender a certificate to such effect signed by
an authorized officer of Xxxxxxx;
(2) Lender's receipt and approval of the following:
(a) A Breakdown of the Disbursement among the tenant
improvements, leasing commissions, capital
improvements, debt service shortfall and
partnership operating costs.
(b) Lease(s) pertaining to the specific portions of
the Secured Property affected, subject to all of
the requirements set forth under "Occupancy Leases
and Certified Rent Roll" contained in the Mortgage
Loan Application/Commitment.
(C) Further, prior to any subsequent Disbursements, Lender shall receive
evidence of satisfactory completion of tenant improvements, capital
improvements, and payment of leasing commissions relating to the
previous Disbursement. Such evidence shall include the following:
(1) Copies of the paid receipts related to the Disbursement.
(2) A copy of executed lien waivers signed by the leasing
agents, contractor(s) and/or subcontractor(s) paid from
the Disbursement and certificates of occupancy if
required by the local municipality.
(3) An inspection of the premises, at the option of Lender.
The fees and expenses incurred for such inspections
shall be paid by Xxxxxxx.
(D) All cost and expenses associated with the Escrow Account are to be
borne by Xxxxxxx. In the event of a default in the Loan Documents,
Lender in its sole discretion will either apply the funds in
reduction of principal or apply the funds towards any outstanding
tenant improvement costs, leasing commissions or capital
improvements.
Xxxxxxx does hereby designate First Union National Bank of South Carolina,
One Insignia Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000; X.X. Xxx 0000,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, as the proposed Depository for Lender's
approval, and Lender does hereby approve such designation.
14. Force and Effect. It is agreed that said Note, Mortgage, Assignment
of Leases, UCC, First Modification and Second Modification, except as expressly
modified, altered or extended by this Agreement, shall be and remain in full
force and effect, and all of the terms of said documents as well as those
additional terms created hereby have been assumed by Xxxxxxx.
15. Borrower's Covenant of Payment and Compliance. Xxxxxxx, in
consideration of the above modifications, amendments and extension and of One
and 00/100 Dollar ($1.00) paid by Lender (the receipt and sufficiency of which
is hereby acknowledged), and of the mutual covenants and agreements herein
contained, does hereby covenant and agree to pay said principal sum, and
interest as set forth in this Agreement, and to comply with the other terms of
said Note, Mortgage, and Assignment of Leases, First Modification, Second
Modification and the provisions of this Agreement.
16. Effect of Agreement. The Parties hereto agree that the execution of
this Agreement shall not release any guarantor, maker or other party of said
Note or Mortgage or any undertaking in connection therewith, nor shall this
Agreement effect any release of any collateral given at any time to secure
payment of said Note or said other undertaking.
17. Xxxxxxx Representation as to Consent. Xxxxxxx represents that no
consent of any person, firm or corporation, not a party hereto, is required for
the effectiveness of this Agreement and Xxxxxxx agrees to indemnify and hold
harmless the Lender from or against any and all loss, damage or liability
whatever, including attorney's fees, arising out of the failure to obtain
consent of any person not a party hereto.
18. Rate of Interest. It is agreed that nothing herein shall mean or be
construed to mean to call for a rate of interest in excess of that allowed to be
charged by the laws of the State of South Carolina; and that if the provisions
hereof should be determined to call for a rate of interest in excess of the
maximum rate allowed by said laws as to any person, firm or corporation, then
immediately or without necessity of any further action, the interest rate herein
provided shall, as to such person, firm or corporation, be immediately reduced
by that amount necessary to eliminate said excess.
19. Binding Nature of Agreement. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto, their heirs, successors and
assigns.
IN WITNESS WHEREOF, we have hereunto set our hands and seals the day
and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: LENDER:
NEW YORK LIFE INSURANCE COMPANY
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
/s/ Xxx Xxxxxxxx Attest: /s/ Xxxxxxx Salabella
XXXXXXX:
Xxxxxxx Companies Income
Properties, L.P. I, a Delaware
Limited Partnership
By: Xxxxxxx Management Limited
Partnership, General Partner
By: 104 Management Inc.,
General Partner
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx, Xx.
/s/ Xxxxxxxx X. Xxxxxx Attest: /s/ Xxxxxx Xxxxxxxx
Attest: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Assistant Secretary
STATE OF NEW YORK
A C K N O W L E D G E M E N T
COUNTY OF NEW YORK
I Xxxxxxx Xxxxxxx, do hereby certify that Xxxxxxxx X. Xxxxxx, as duly
authorized Real Estate Vice President of NEW YORK LIFE INSURANCE COMPANY, on
behalf of the corporation, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument, and that Xxxxxxxx
X. Xxxxxx, as duly authorized Real Estate Vice President of the corporation
personally appeared before me this day and acknowledged his/her attestation to
the foregoing instrument.
WITNESS my hand and official seal this 3rd day of October, 1995.
/s/ Xxxxxxx Xxxxxxx (SEAL)
Notary Public for New York
My Commission Expires:6/3/97
STATE OF SOUTH CAROLINA )
) A C K N O W L E D G E M E N T
COUNTY OF GEORGETOWN )
I, Xxxxxxxx X. Xxxxxx, do hereby certify that Xxx X. Xxxx,Xx., as a duly
authorized officer of 104 Management, Inc., on behalf of 104 Management, Inc.
in its capacity as General Partner of Xxxxxxx Management Limited Partnership,
General Partner of Xxxxxxx Companies Income Properties, L.P. I, personally
appeared before me this day and acknowledged the due execution of the foregoing
instrument and that Xxx X. Xxxx, Xx., a duly authorized officer of 104
Management, on behalf of 104 Management Inc. in its capacity as General Partner
of Xxxxxxx Management Limited Partnership, General Partner of Xxxxxxx Companies
Income Property, L.P. I, personally appeared before me and acknowledged his/her
attestation of the foregoing instrument.
WITNESS my hand and official seal this 29 day of September, 1995.
/s/ Xxxxxxxx X. Xxxxxx (SEAL)
Notary Public for South Carolina
My Commission Expires: 3/12/01
